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Shenandoah-Dives Mining Company

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The Shenandoah-Dives Mining Company was active in the San Juan Mountains from the 1930s through the 1960s. As one of the largest mining operations in the region during the twentieth century, the company’s history exemplifies the boom and bust cycles and labor strife that were common in Colorado’s resource extraction industry. Today, the Shenandoah-Dives legacy is preserved at the Shenandoah-Dives Mill site, which has been named a National Historic Landmark.

Beginnings

In summer 1925, a group from Kansas City, Missouri, who later called themselves the “Shenandoah-Dives Syndicate,” contracted Denver mining engineer Charles A. Chase to travel to the San Juans. The syndicate wanted to invest in a gold mine, and Chase knew the region and its mineral resources well. He first visited the San Juans in 1899 at the invitation of Arthur Winslow, owner and manager of the Liberty Bell Gold Mine in Telluride. Moving up from company surveyor and assayer, Chase became general manager of the Liberty Bell and continued to work there for twenty-five years, until it closed in the 1920s.

In August 1925, Chase climbed the peaks between Telluride and Silverton, surveying for further exploration and development. First, he assessed ore samples for gold and silver from the Old Hundred Gold Mine that sat in a well-defined vein running through King Solomon Mountain. Chase then assessed the rich veins of the Shenandoah-Dives and North Star Mines. His investigations led him to encourage Kansas City investors James Oldham and Clifford Histed to purchase and consolidate the Shenandoah-Dives, North Star, Terrible, and old Mayflower Mines into one large complex. Acting on Chase’s recommendation, the Kansas City group raised capital to purchase thirty-one patented claims and twelve unpatented claims, covering a total of 316 acres. Between 1925 and 1927, the company began developing its Colorado holdings, with Chase as general manager of the Shenandoah-Dives operation.

Chase hired twenty-seven men as machine runners, trammers, cagers, and top men. An engineer oversaw their work. Handling the non-mining end of the operations were a cadre of blacksmiths, carpenters, cooks, firemen, and others. Chase hired James McKay as the mine’s foreman. Soon after, the men opened a new tunnel at the Mayflower Mine, with early production garnering about $400,000 in mineral wealth. By July 1928, the nascent company also profited from the use of the Iowa-Tiger Mill, which it rented in Arrastra Gulch, well below the mineshaft.

Mill

Later in the year, Chase presented another proposal to the syndicate outlining a new tunnel, tramway, and mill and calling for more mine equipment and a working fund of $50,000. The syndicate accepted the proposal, with construction on the new structures beginning in June 1929. Chase turned to his Denver colleagues to help him with the design and construction of the flotation mill that he planned to build at the base of the mountain. He hired a former colleague from the Colorado School of Mines, Arthur J. Weinig, as consulting metallurgist and engineer, while Denver-based Stearns-Roger Engineering designed the mill structure.

Mine Complex

A large labor force was crucial to the success of any mining operation. Men traveled to Silverton from all over Colorado and the West to wait in line for a job at the mine. To provide housing for workers, Shenandoah-Dives built a boardinghouse near the Mayflower Mine portal. The five-story building became home for the single men and any others who did not live in Silverton.

In addition to the boardinghouse, the aboveground buildings at the Mayflower Mine included the original Mayflower Mine tramway terminal building (expanded to become the Shenandoah-Dives terminal) and a secondary tramline and terminal to the boardinghouse. Given the threat of substantial snowfall and avalanches in the San Juans, facilities were often built belowground. The mine’s underground works included a crushing plant, compressed air plant, blacksmith shop, and foreman’s office. A short underground passage connected the mine and boardinghouse, allowing the men to get to work in inclement weather.

Due to the high altitude and treacherous mountain trails, early Silverton mining operations relied on mules and aerial tramways for the transportation of ore, equipment, and men. By the twentieth century, the aerial tram was the lifeblood of the mining operation. The company’s main tramway connected the Mayflower Mine to the Shenandoah-Dives Mill. Later, truck trails climbed the edge of the mountains but ended well below the mine portals. Women working at the boardinghouse and miners’ wives visiting the commissary also rode the line up to the top. At the time, no women worked in the mines.

During the 1930s, the Shenandoah-Dives Mining Company’s production of copper, lead, and zinc helped meet the needs of American manufacturers. Other regions around the country languished, with only intermittent openings as the price of gold went up and down. The syndicate’s initial reason for investing in the Shenandoah-Dives Mine was for the gold and silver, but base metals fast became the company’s economic mainstay. At that time, Shenandoah-Dives represented the largest single industrial payroll in the Four Corners region.

Labor Strife

Unionization had slowly improved miners’ working conditions, hours, and wages, and congressional passage of the 1938 Fair Labor Standards Act added ammunition to the union’s battle for better working conditions. Although Chase tried to meet most of his employees’ needs, pressure from the Shenandoah-Dives board of directors forced him into the awkward position of having to balance those needs with that of the absentee owners. In 1939 the company lowered the wage base rate to counter the effects of the act. In addition, company rules now required an eight-hour workday, overturning earlier agreements between union and company officials for a “portal to portal” workday of six hours. Union representatives and company officials had agreed on the six-hour day after years of negotiating. The miners of Local No. 26 reacted to its undoing and to the lower wage rate by striking in July 1939.

After months of unsatisfactory negotiations between the company and union negotiator A. S. Embree, union members became anxious about the mine’s future, as other mines closed during the Great Depression. Members of Local No. 26 disbanded their organization to create a new local that would vote to call off the strike. The new union local became the San Juan Federation of Mine, Mill and Smelter Workers. The defunct Local No. 26 turned over its remaining assets to the new union and negotiations resumed, with the mine and mill reopening on September 7, 1939. Negotiations included a new work-versus-pay policy. Chase implemented the contract mining system, whereby more productive workers earned more. This lowered company costs and allowed Shenandoah-Dives to remain in operation. Chase gambled that the company’s production of base metals, such as lead and zinc, would carry the cost of operations alongside some additional profits from gold and silver. His mix of luck and foresight would see the company through the worst years of the Depression.

A Brief Period of Success

World War II ushered in a period of artificially inflated prices for essential resources and revived the mining industry across the nation, including the operations at Shenandoah-Dives. The war also brought great change to Colorado, as military installations and scientific developments brought manufacturing to the state. As economic activity focused on military preparedness, the federal government classified mining and milling operations as either “essential” or “non-essential.” In 1942 the government suspended all non-essential activities for mines with more than 30 percent of their dollar value in gold and silver. Shenandoah-Dives’s gold and silver production—a by-product of its base metals operations—reached the legislative cap, and the company was shut down. But following letters from Chase, the government concluded that the company’s base metals production was essential to national security, and the mine was reopened to supply American metal needs throughout World War II and the Korean War.

After the Wars

When the wars ended, the demand for metals stopped. Ore production declined as demand for American metals waned. The industry was plagued by rising costs under a fixed selling price that capped growth. Stockpiled metals met the needs of manufacturers, which now turned from making munitions to making household goods such as automobiles and home appliances. While other industries flourished, the gold and base metal industries languished. During President Harry Truman’s administration, Shenandoah-Dives received federal funding to explore new ore veins, but lower-grade ores and rising labor costs made any venture unprofitable. Foreign metals flooded the US market when the Paley Commission encouraged the United States to purchase foreign metals in hopes of preventing communism from infiltrating smaller developing nations. As a result, metal prices collapsed alongside the future of the Shenandoah-Dives operations in Silverton.

In 1953, after twenty-five years of mining and milling in Silverton, the Shenandoah-Dives Mining Company shut down its operations. With the company’s demise, smaller Silverton companies that relied on the Shenandoah-Dives Mill to buy their ore were forced out of business. The syndicate appointed a caretaker for the mine buildings and fired Chase as manager. Charles Chase died in Denver on August 31, 1955.

Final Years

The syndicate’s firing of Chase and the closure of the Shenandoah-Dives Mine and Mill did not signal the permanent demise of operations. Between 1953 and 1957, the mill operated intermittently, as the company underwent a series of ownership changes. In 1957 the Shenandoah-Dives Mining Company merged with Marcy Exportation Corporation, a uranium mining company in Durango, and the mill reopened. The merger created the Marcy-Shenandoah Corporation. Two years later, Marcy-Shenandoah sold its interests to the Standard Uranium Corporation of Moab, Utah. In 1960 Standard Uranium changed its name to the Standard Metals Corporation.

That year, the Shenandoah-Dives mine closed forever. The mill continued to operate, processing ore from several area mines. In 1985 Standard Mining sold its Shenandoah-Dives holdings to the Sunnyside Gold Corporation. Sunnyside and its associated companies participated in two joint ventures using the mine and mill. By 1990, Sunnyside Gold was the sole owner, and in 1992 they announced the permanent closure of the mine complex and mill due to declining zinc prices and depletion of the gold veins. By 1996, cleanup of the tailings ponds and mine site was mostly complete. In 2000 Secretary of the Interior Bruce Babbitt designated the Shenandoah-Dives Mill a National Historic Landmark, representing the nation’s mining heritage.